Firms eager to invest in retail

Friday, Jul 19, 2013 09:47

Consumers shop for eggs at a supermarket in Ha Noi. The nation is predicted to have between 1,200-1,300 supermarkets and 180 shopping centres by 2020. — VNA/VNS Photo Pham Hau
HA NOI (Biz Hub)— Several domestic firms have seized the opportunity to invest in Viet Nam' retail industry, even though the economic crisis is far from over.

Nguyen Manh Duy, managing director of the Ocean Retail and Real Estate Management Company, said that Ocean Group, his parent company, plans to open between 70-80 supermarkets and shopping centres nationwide by 2015.

This would make the retail industry one of the group's core businesses. The company also has two supermarkets that are already in operation, the Ocean Mart in Ha Dong and Ocean Mart Thang Long.

The group believes that its available property will help its plans to develop its supermarkets and shopping centres, says Duy. In addition, the gloomy domestic real estate market gives it the chance to invest in the retail industry for much smaller overheads.

Son Ha Group, a large domestic producer of home appliances and stainless steel products, has opened its first hypermarket in Ha Dong District, Ha Noi, starting a new line of business.

Vu Vinh Phu, chairman of Ha Noi's supermarket association, said that the domestic retail industry is an attractive sector, so many firms are currently considering investing in the retail industry, especially as supermarket have become popular with consumers.

Meanwhile, CB Richard Ellis Viet Nam, a property consultant and services firm, said that the approval of the Ministry of Industry and Trade's plan for developing supermarkets and shopping centres by 2020 has had a positive influence on investors.

Under the plan, the nation is predicted to have between 1,200 – 1,300 supermarkets and 180 shopping centre's by 2020. By 2020, the retail value of supermarkets and shopping centres is expected to account for 45 per cent of the country's total retail revenue for goods and services.

However, Le Vinh Son, Son Ha Group's chairman, said that he has had to delay the opening of his second supermarket, that was due to start operating in 2012, but has been delayed because of business difficulties.

Phu said it is difficult for businesses in the retail industry at the moment because of the drop in purchasing power during the economic downturn. On top of that, developing a supermarket or a shopping centre's trade mark is extremely difficult due to high competitiveness in the market.

A business needs only six months to build a supermarket, but it needs 10 years to develop and establish it with consumers, said Phu.

Enterprises still have the opportunities to develop supermarket and shopping centre networks, Phu said, but they must plan carefully, do the appropriate market research, source adequate quantities of goods and train up their workers before launching a new chains of retail outlets.

Duy added that the retail industry is the most competitive in the country, so a company must carefully nurture its supermarkets before it can reach a significant level of success in this sector. — VNS

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